SOUTH AFRICA – Corn prices in South Africa collapsed this week, thanks to estimates of a sharp rebound in production this year.
March white corn futures in Johannesburg fell some 19% this week, after the country’s main crop forecasting body saw a bigger-than-expected crop on its way.
And prices were also pressured on Friday, as the rand reversed a recent weakening trend against the dollar, which will make imports more affordable.
Big bounce-back for corn crop
This week South Africa’s Crop Estimate Committee released their first estimates of the season, pegging the country’s total maize production at 13.92m tonnes, up 78% year-on-year, following the drought of the previous season.
Of this total, 60% is white maize and the remainder is yellow maize.
This estimate, although preliminary, was much bigger than the 11.90m tonnes forecast by South Africa’s Agricultural business chamber Agbiz.
“Although this is an encouraging picture, it is important to note that these are first estimates for the season, we will get a much clearer view of the crop over the coming months,” said Wandile Sihlobo, at AgBiz.
“With that said, recent indications suggest that the crop is in fairly good condition throughout the country,” Mr Sihlobo said.
“The next two weeks could present dry weather, with scattered showers and that should offer a “breathing gap” after weeks of high rainfall.”
The rise in prices comes despite the spread of fall army worm across the country, with fears of damage on the back burner for now.
Although damage has been reported for small-scale and subsistence farmers, large producers are successfully fighting the pest, co-ordinated by the country’s ag-ministry.
Imports staying brisk
Despite the expected big harvest, South Africa is still having to import grain at a rapid pace.
“South Africa will continue to import maize throughout the 2016-17 marketing season in order to supplement domestic supplies,” said Mr Sihlobo
As of 24 February 2017, South Africa has imported 1.98m tonnes, some 80% of Agbiz’ forecast for the season.